FORA puts Preston Park up for sale, Marina protests

A former Army housing tract in Marina worth $60 million is being put up for sale by the Fort Ord Reuse Authority after long and fruitless negotiations with the city of Marina over interests in the apartments.

The reuse agency said late Monday that it would accept offers from "qualified buyers" for Preston Park, a 352-unit townhouse development built for the Army in 1989.

The complex, which includes 301 market-rate apartments and 51 affordable units on 110 acres, has been a bone of contention between FORA and Marina for several years.

"Our City Council is considering the next steps to take in the situation," Marina City Councilman Frank O'Connell said Tuesday.

The dispute boils down to whether transfer of the property from the Army was supposed to end up with Marina owning Preston Park or, as FORA contends, with the reuse agency holding title.

"The city of Marina is looking at interpreting the documents so the city should have the property transferred to it. FORA disagrees with that," O'Connell said.

Until recently, Marina oversaw the contract with a housing management firm that runs Preston Park, but FORA took over that duty at the end of 2011.

The city and reuse agency divide revenues from the rental units, which FORA says are now 97 percent occupied.

For two years, FORA and Marina were in negotiations over the city's possible purchase of FORA's share of Preston Park. A mediation failed to resolve the dispute.

The FORA board in January set in motion the sale of Preston Park, and it commissioned a new appraisal for the tract near Reservation and Imjin roads. In April, the agency board was told the current value of Preston Park is $60.9 million.

In its Monday announcement, FORA said the sale of Preston Park would result in 50 percent of the net revenue going to Marina, with the rest being used by FORA to pay off a $19 million bank loan that financed road projects, and to pay for demolition of old barracks and environmental mitigation work.

Marina City Councilwoman Nancy Amadeo said she couldn't discuss the issue because "we are still discussing Preston Park in closed session."

But Amadeo said it wasn't a surprise that FORA would move ahead with plans to sell the residential property. "We were certainly aware they had gone out to (find a broker)," she said.

FORA Executive Officer Michael Houlemard said in a prepared statement: "Preston Park is an important asset to the Marina community, and the tenants deserve a continued high-quality residential community. We are searching for a buyer who will meet those combined objectives and be a valued partner to the city of Marina."

Paula Pelot, president of the Preston Park Tenants Association, said the property should be Marina's. "That was the intent when the Army transferred the property," she said.

"It's not good for the city of Marina, if the city ... loses half the value of that asset to FORA. That is flat-out wrong," she said.

Rental revenues now split 50-50 by the city and FORA amount to about $3.2 million a year. That alone represents a significant source of potential future revenue to the city, Pelot said.

As for the possible sale of Preston Park to a third party, Pelot said it's hard to say what it would mean to tenants because "we don't know if there would be conditions other than the deed restrictions for the affordable units."

FORA spokeswoman Candy Ingram said the agency is in the process of listing Preston Park on the market. There is no set asking price, but agency officials "would not anticipate anything less" than the appraised value.

As to Marina's claim to full ownership, the parties went through a 2½-year process and the mediator's recommendation was to have FORA sell the property and split the proceeds, Ingram said.

A new owner would have to honor current tenant leases and any other existing obligations, Ingram said.

"I know there has been some interest already, just from word getting around after the mediation," she said.